If owner time costs $80 and other job costs are $40, fixed cost is $120. At a 25% target margin and no percentage fee, $120 ÷ 0.75 = $160.
1. Define one sellable scope
Write down the deliverable, quantity, location, revisions or visits, and anything excluded. A price without scope is hard to compare or defend.
2. Count all owner time
Add delivery time, preparation, travel or setup time, communication, and closeout. Multiply total time by your chosen owner pay target per hour. This is a cost assumption, not profit.
3. Add job costs and allocated overhead
Include helper pay, materials, travel, equipment use, and a reasonable share of recurring expenses. Add fixed payment fees as a job cost; percentages charged on the quote go in the pricing denominator.
4. Apply a margin to the selling price
Divide fixed cost by 1 minus percentage fees minus target margin. Check the exact minimum and round up to a practical quote. Recalculate if scope changes.
When to use this method
Use this sequence before you send a new kind of service quote. It is especially useful when you know the customer’s request but have not yet translated it into hours, direct costs, and a deliverable boundary.
A mistake to avoid
Do not start with a desired selling price and reverse-engineer costs to justify it. Check what the work truly requires, then compare the resulting target with what the customer may accept.
What this does not tell you
These are calculation examples using stated assumptions. They are not national service rates, local quotes, tax advice, or a prediction of demand. Confirm your own scope, costs, fee basis, and any local requirements before sending a price.
Source and updates
The formulas and assumptions are explained in our methodology. This guide was prepared on 2026-11-06. If you find an error, send a correction.